The city of Key West will send a formal complaint to state lawmakers who want to give tax exemption status to private companies who build housing on military-owned land.

At issue is the county's dispute with Southeast Housing, a company that partners with the Navy to provide housing subdivisions on five parcels of federal land in Key West, including Peary Court, which is home to some civilians.

"This resolution asks our elected officials to stand their ground and honor the request of the city," said City Commissioner Jimmy Weekley, who sponsored the agenda item. "In this case, it's right that housing that has been transferred to a private individual should be paying taxes."

In a 6-1 vote Tuesday night, city commissioners approved a resolution opposing two state bills that arose after the county property appraiser's office slapped $11.3 million in liens on five military properties in Key West that the Navy owns in partnership with Southeast Housing, part of the corporate giant Balfour Beatty.

Southeast is suing the property appraiser's office in local circuit court over the liens, which cover property taxes, interest and penalties dating back to January 2007, when the private company bought the buildings.

The Navy owns the land while Southeast owns the buildings.

The resolution came in response to newly elected State Rep. Holly Raschein's support of the bill. Raschein, a Republican, has said that military families deserve improved housing even at the expense of local government.

Raschein was among 13 members of the state House of Representatives' Veterans and Military Affairs Committee who voted last month in favor of the bill.

But before the City Commision meeting on Tuesday, Raschein announced she will propose an amendment to House Bill 531.

"I have listened to the input from both my constituents and the city of Key West and will be submitting a bill amendment when it reaches the Economic Affairs Committee, on which I serve," Raschein said in a prepared statement.

"I suggest we approach this diplomatically and continue having a good relationship with the U.S. Navy," said City Commissioner Tony Yaniz, who nonetheless supported the resolution that opposes the bill.

Weekley said that Key West will continue to have a healthy relationship with the Navy and that the resolution is about what is fair for the city.

Only Mayor Craig Cates dissented, saying he wasn't certain Tuesday if the resolution represented the majority opinion of Key West residents.

"I agree they should be paying taxes, but the thing about it is, if we weren't the city that was going to benefit from those taxes, would we feel the same way?" Cates asked rhetorically. "A lot of people feel the military needs to be able to supply housing for our military personnel and they need that tax break to be able to do it."

Commissioner Teri Johnston said that the resolution reflects the changing times, when the military is deciding that it doesn't need as much land for housing as it once did.

"It's a good tool for communication," Johnston said of the resolution. "This exemption was awarded based on a set of criteria and conditions. When the conditions change, then you have to go back and revisit that."

In addition to Peary Court, Southeast owns housing on military land at Trumbo Point, Sigsbee Park, Truman Annex and the Navy hospital in Key West.

Also on Tuesday night, the City Commission:

• Voted unanimously to direct city staff to purchase 13,000 64-gallon wheeled recycling carts for residents within the next two months.

The grand total, including freight and assembly, is $631,290, a good price, said Utilities Manager Jay Gewin, because Key West can piggyback on a competitive bid already sought by Deerfield Beach, Fla.

The new, larger carts will replace the current 18-gallon recycling bins, but residents won't be forced to accept and store the 64-gallon cart, said Gewin.

Key West's carts will be a royal blue and not green with yellow lids as previously reported in The Citizen.

• Hired Jacksonville-based firm Langston Associates and a subcontractor, IN REM, as the city's new grant writing team, in a 5-2 vote.